There are distinct differences when it comes to managing an international workforce as opposed to managing a workforce in the United States. Globalization Partners Chief Administrative Officer and General Counsel Nancy Cremins outlines three major ones.
1. Collective Labor Agreements
In the United States, only about 6 percent of workers in the private sector belong to a union. However, collective labor agreements are much more prevalent globally. Many workers in Sweden, France, Brazil, and a variety of other countries are covered by a collective labor agreement that sets baseline benefits that an employee must be provided. An employer may have to negotiate with a labor union if a covered employee must be terminated at some point.
2. Unexpected Required Payments
Have you ever heard of a “13th-month bonus?” In many countries in Latin America, as well as some countries in Europe and Asia require—either by law or by collective bargaining agreement—that employers pay employees a bonus equal to one month’s salary, usually at the end of the year.
In a few other countries, employers are expected to pay a 14th-month bonus.
3. Seniority and Notice
In certain countries, employers must provide employees with a mandated amount of advanced notice prior to terminating an employment relationship. Seniority-based notice periods are typically set by statute, though in some cases may be negotiated by contract. Longer notice provisions can be used as a bargaining chip for an employer to lure high-value talent. But long notice periods can result in a significant payout if things don’t work out.
Operating in countries around the world is great for business. But managing an international workforce is extremely complex when doing it on your own. Globalization Partners, an organization that helps companies expand internationally without setting up subsidiaries overseas, has the best in-house legal team in the Global Professional Employer Organization (PEO) industry. Our international experts can help you navigate these—and any other—hurdles that may come your way when it comes to international workforce management.